Standard Bank of South Africa vs South African Reserve Bank and Others (047643/2023) (2025) ZAGPPHC 481.

Background

In May 2025, the Pretoria High Court ruled that cryptocurrencies do not constitute "capital" under South Africa’s Exchange Control Regulations ("ExCon Regulations") and accordingly, are not subject to South African Bank Reserve ("SARB") approval for cross-border movement.

The case was brought by Standard Bank against the SARB, the Minister of Finance, Nedbank and the liquidators of Leo Cash and Carry ("LCC"), in which Standard Bank was attempting to recover funds it had loaned to LCC before the company was placed in liquidation in 2022.

The case arose after the SARB’s Financial Surveillance Department ("FinSurv") forfeited over R26 million from bank accounts held by LCC, following an investigation into alleged crypto-related exchange control contraventions. Standard Bank challenged the forfeiture, arguing that the ExCon Regulations do not apply to crypto assets.

High Court’s Key Findings

1. Crypto is not “Capital” under the ExCon Regulations: The court determined that cryptocurrencies do not qualify as "capital" or "currency" under Regulations 3 (1)(c) and 10(1)(c) of the ExCon Regulations, primarily because they do not constitute legal tender, and thus fall outside traditional capital export restrictions.

   
   

2. SARB's Authority: The judgment emphasised that the SARB's regulatory actions must be rooted in statutory authority. In the absence of specific statutory provisions regulating crypto assets, the court concluded that SARB had acted ultra vires in ordering the forfeiture.

   
   

3. Outdated Regulations: The court highlighted that the ExCon Regulations, originally enacted in 1961, were not designed to address the advent of digital currencies - highlighting the urgent need for legislative reform.

Conclusion

The Court set aside the forfeiture and agreed with Standard Bank that the existing ExCon Regulations do not apply to cryptocurrency. Adopting a restrictive interpretation, the court found that cryptocurrency does not fall within the ambit of "currency" or "capital" as contemplated in Regulations 3(1)(c) and 10(1)(c).

The judgment explicitly stated that there is a "regulatory lacuna" concerning cryptocurrencies and that it is the legislature's role, not the courts', to amend the laws to cover such new asset classes.

SARB's Appeal

On 3 June 2025, the SARB filed an appeal challenging the High Court’s ruling, contending that the court erred in excluding crypto assets from the ambit of the ExCon Regulations and argues that crypto assets should be treated as either "capital" or "currency" for regulatory purposes.

Grounds for Appeal

1. Risk of Capital Flight: The SARB argues that excluding crypto assets from the scope of ExCon Regulations creates a significant regulatory "loophole" enabling the facilitation of unmonitored capital outflows via cryptocurrencies.

   
   

2. Crypto as Capital: SARB asserts that digital assets should be classified as "capital" and be regulated accordingly.

   
   

3. Misapplication of Regulation 22C: The bank also argues the High Court didn’t properly apply Regulation 22C, which empowers SARB to block transactions for suspected exchange control breaches.

Implications

1. For Regulators: SARB’s appeal could serve as a catalyst for legislative reform to explicitly classify cryptocurrencies as "capital" under the ExCon Regulations, mirroring the precedent set by the Oilwell judgment, which led to the amendment of the Regulations to expressly include intellectual property within the definition of capital for the purposes of Regulation 10(1)(c).

   
   

2. For Financial Institutions: Banks and CASPs should remain cautious, as SARB may implement interim crypto controls while awaiting formal regulatory updates.

   
   

3. For Crypto Asset Service Providers ("CASPs") and Investors: Investors should exercise caution and stay informed about the evolving legal landscape surrounding crypto assets in South Africa.